RBI VRRR auction sees weak demand, cut-off at 5.49%

The RBI's 3-day VRRR auction on October 12, 2026 received offers of ₹37,558 crore against a notified amount of ₹2,00,000 crore, with full acceptance at a cut-off rate of 5.49%. The low bid-to-cover ratio indicates surplus liquidity in the banking system is lower than the RBI's intended absorption, suggesting a liquidity deficit or tighter conditions. This may signal that the RBI's liquidity management is becoming less effective, potentially influencing short-term rates.